Finance · updated 58m ago · 3 min read
Airbnb Commits $250 Million Housing Accelerator To Restart Stalled Austin Affordable Homes
Airbnb launches Housing Accelerator with $250 million financing to fund stalled affordable housing projects First investment of $6.4M will advance 201 affordable apartments in Austin's St. John project
Whether the programme’s aim is gap-financing or Airbnb-supply expansion.
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Bisnow
“The company said its returns will be below market rates, and it will reinvest the returned funds into additional housing projects.”Read the original ↗
Realtor stresses the goal is not to add Airbnb supply, while Bisnow highlights reinvestment into more housing projects.
Airbnb’s $250M housing push
Airbnb announced a Housing Accelerator on Monday with an initial investment of $250 million in rental housing developments that are ready to build but stuck on the one-yard line, aiming to unlock $5 billion in capital investments over the next ten years.
“Airbnb is investing $6.4 million to help move forward a long-stalled affordable housing development in Northeast Austin”
The first chunk of $6.4 million is going toward a roughly 200-unit project in Austin, Texas designed for affordable prices, and KEYE reported the funding would support construction of 201 affordable apartments at 800 E. St. John Ave.
KEYE said the fully affordable portion of the project is required under Airbnb’s agreement with the City of Austin in order to build a companion 325-unit mixed-income development, and it said the redevelopment is expected to bring more than 500 homes, retail space, a park, and public art to the site.
Airbnb CEO Brian Chesky framed the effort as part of a broader response to affordability, telling CBS Austin, “This is a project that’s been stalled for 20 years in the making,” and adding, “It’s been on the one-yard line, so we’re just a very, very small part of the solution.”
KEYE also reported that Austin Mayor Kirk Watson called the investment an example of the collaboration needed to expand housing in Austin, saying, “Expanding housing takes all of us.”
Financing model and eligibility
Airbnb described the Housing Accelerator as “last-dollar” financing, providing incremental capital that can allow projects with permits and other requirements largely completed to proceed, and it said the company will commit an initial $250 million in “last-dollar” financing.
The Post Millennial said the program is designed to help developers with financing shortfalls for building but have cleared other hurdles for projects to pay for the builds, and it said Airbnb has not ruled out going to other markets with the program.
KEYE reported that the initiative will prioritize affordable and mixed-income development opportunities and that Airbnb also said it will support policy efforts involving zoning, permitting and building-code changes, including through Austin’s pro-housing advocacy group AURA.
Bisnow added that the 201 units in Austin “won't be allowed to be listed as short-term rentals,” and it said Airbnb estimated the $250M initial investment could translate to more than $5B in capital.B
KEYE further reported that Airbnb CEO Brian Chesky said Airbnb listings account for about one-half of 1% of Austin homes and that many local hosts use the income to help pay rent or their mortgage.
Policy, prizes, and local partners
Beyond capital, Airbnb said the Housing Accelerator includes a $5 million prize for companies that can develop technology that will make it faster, cheaper, and easier to build a home, and it said the initiative also includes support for zoning, permitting and building-code reforms.
“Airbnb will "make an initial investment of $250 million in rental housing developments that are ready to build"”
KEYE reported that Airbnb’s announcement included policy support through AURA and that Airbnb also said it will support policy efforts involving zoning, permitting and building-code changes, while it described the broader project as expected to include 526 rental apartments, commercial space and an expanded St. John Park with final delivery anticipated in 2028.
The Post Millennial quoted Chesky saying, “The housing crisis wasn’t created overnight, and it won’t be solved overnight,” and it quoted him adding, “But we can start moving in the right direction, and that is exactly what the Airbnb Housing Accelerator is designed to do.”
KEYE said City leaders finalized a redevelopment partnership earlier this year with the Housing Authority of the City of Austin and Greystar, and it reported that José “Chito” Vela, Mayor Pro Tem and Councilmember for District 4, said, “Austin's housing shortage demands a collaborative approach.”
Bisnow said Airbnb announced support for local leaders including the Citizens' Housing and Planning Association, the Florida Housing Coalition and the Housing Action Coalition, and it described the program as a multi-pronged effort that combines below-market financing with policy advocacy and an innovation prize.B